Lasik Vision Inc

question 43

Multiple Choice

Lasik Vision Inc.recently analyzed the project whose cash flows are shown below.However,before Lasik decided to accept or reject the project,the Federal Reserve took actions that changed interest rates and therefore the firm's WACC.The Fed's action did not affect the forecasted cash flows.By how much did the change in the WACC affect the project's forecasted NPV? Note that a project's projected NPV can be negative,in which case it should be rejected.

• A)−$59.03
• B)−$56.08
• C)−$53.27
• D)−$50.61
• E)−$48.08

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Definitions:

Comparative Reasoning

A method of reasoning that involves comparing similarities and differences among objects, concepts, or situations.

Soundness

The quality of an argument when it is both valid and its premises are true, ensuring the truth of the conclusion.

Logical Strength

The degree to which the premises of an argument support its conclusion, ensuring the argument is convincing or persuasive.

Comparative Reasoning

The process of making judgments or decisions based on the comparison between alternatives.